Thomas Kipp, CEO DHL Global MailRequirements forGlobal SuccessWorld Mail and Express Europe ConferenceMadrid, 5th June 2013
2Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013Conclusions from 2 Years Ago• Customer expectations look more and more similar around the globe …… but “Act global, think local” still applies• Lines between postal and (other) logistic markets get blurred …… but professional handling of mail and parcel business is moreimportant than ever• VAS and comprehensive solutions are in demand …… but highly efficient basic services and high quality are still the basisfor success
3Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013Mega Trends Impacting the Postal Market Since YearsParcelMailphysicalproductsdigitalproductseCommerceeSubstitutionChallenge:fierce competitionRegulatory environment increasingly difficultChallenge:manage growthChallenge:manageinfrastructureChallenge:consumers areused to servicesfree of charge
4Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013Postal Operators are still facing multiple challenges• The need to serve both merchants, shippers or sendersAND consumers requires to think comprehensivelyabout future business models• Global E-Commerce is the main growth driver for most ofthe PPOs, but E-Commerce is not waiting for PPOsThe strategic options are• “Defend”– Protect monopoly– Focus on physical mail and direct marketing• “Transform”– Develop new services• “Grow”– Enhance product offer– Focus on new customer segments– Enter new markets– Merger and AcquisitionsThe Way Forward?
5Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013• Strong, reliable, global transportationand delivery network• Global Capabilities in terms of people and ITGlobal Presence• E-Commerce enabler• Digital solutions• Car sharing• Travel• Strengthen local mail/parcel network• Develop new services for thehome market (or home region, e.g. Europe)– Finance services– Mobile servicesLocal Hero• Focused investments in marketswith growth potential, e.g. BRIC and/or MISTNew SegmentsNew MarketsWhere to Play?
6Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013Which Services?Mail ParcelphysicaldigitalHANDYPORTOwww.dhleasygermany.comFUNCARD
7Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013Regulatory & Legal RequirementsConsumer RequirementsE-commerceMerchant RequirementsNeed for Action in a Complex Market Environment• EU – Greenbook• Security / Cybercrime• Data privacy• Customs / VAT• Marketing services• Single sign-on• FLC calculator• Payment services• Insurance and certification• Anonymous shopping• Customer service• Last mile delivery options• Warehousing andfulfillment• Cross-border shipping• Customs / taxmanagement• Returns solutions§§§§§ §
8Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013Successful Mobile Apps areused by 10+mn people aday and generateUSD 100,000+ revenuea dayInternet is the mosttrusted source ofinformation todayThe first SMS was sent20 years ago.In 2012 8.5trn textmessages were sentworldwide70% of consumersspend more then 1honline every day, 35%spend more then 3hrsAverage user spends 30honline, visits 99 domainsand 300 WebPagesa monthIt took AOL 9 years to get to1mn users.It took Facebook 9 months.It took “Draw Something”(mobile app) 9 days.~ 1.15bn physical letters sent per day~ 247bn emails are sent per day~ 400mn tweets per day on Twitter~ 30bn pieces of content are uploaded onFacebook each week~ ~ 4trn impressions (display ads) onlinein 2011Speed is the Name of the Game!Source: Business insider; Booz & Co; The Radicati Group
9Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013Alibaba Group officially launched the China Smart LogisticsNetwork (CSN) on May 281)The Need for Speed – Example Alibaba Group1) TC TechCrunch, Catherine Shu• CSN aims to become the backbone of the country’s USD 190bne-commerce market• The network will be able to deliver shipments to any city in Chinawithin 24 hours• CSN is backed by about USD 16.3bn in funding and slated forcompletion in 8 to 10 years• CSN will provide third-party couriers, warehouses, shipping andother services, as well as analytics to help vendors improveshipment speed and reduce costsThe big players in e-commerce do not wait for logistics/postal companies to provide solutionsmeeting their needs.They create their own solutions.
10Deutsche Post DHL | PageRequirements for global success | Madrid | 5th June 2013We all benefit from a growing parcel business because of the rapidgrowth in e-Commerce. But ask yourself the following questions:Conclusion• Are you getting all the cream or is your business just raising withthe tide?• Have you decided which customer segment you want to focus on(B2B vs. B2C)?• Are you competitive enough to cover all product segments(mail vs. parcel vs. digital)?• Did you decide the scope of your operations(domestic vs. globally)?• Will you be fast enough?In the end, it is the customer who decides about our economicsuccess.In the worldwide mail and parcel business, we need to worktogether in order to leverage the postal network to benefit fromE-Commerce.